Community Media Matters

2011-12-06T12:15:00.000-08:00

How do you tell an account that possibly

their business (not the ad) is the problem?

By John C. Peterson

The Peterson Group

“The ads aren’t working…”

How many times have you heard that and inside you want to scream any number of responses such as:

· “These are the dumb ads you insisted we run, Girrrrr.”

· “The ad is fine, you and your store are the problem.”

· “Did your parents have any kids with common sense?”

We know you can’t be that direct, you need to be nice. But, if you’re about to lose a customer and gain a critic, then maybe some tactful honesty and candid are in order.

My advice is don’t wait for that conversation, be proactive. You know what a bad ad is and you know a store with problems when you see one. You might have a chance of talking them into a new ad, but it’s real tricky to tell them the store has problems. It can be a dilemma, because even the best of ads will not fix a terrible store and a different ad bring in more people sooner to decide the store is not for them.

Bottom line, if they’re going to drop out of the paper, what do you have to lose? Just be constructive, careful and polite.

One option is to put on your best Peter Falk face and ask questions, like this:

“Have people ever commented about the parking to you?” (That’s a nice way of saying people don’t like to circle the block or wade through the puddles in your muddy parking lot.)
"People ever tell you they have trouble finding the store?” (Interpret that to be the prelude to a discussion about their lousy location or deficient signage.)

As consumers our needs are pretty basic and the relationship is simple. One side has the goods and services and the other the money. As consumers we’re looking for a hassle-free and easy transaction, and the easier and the more pleasant the experience, the greater chance of success for both sides.

Unfortunately, many of the basics get lost along the way. Few store owners can be truly objective about their business and become be stubborn, defensive and aloof. Many of these people have limited business knowledge and few have a clue about marketing. They’ve converted a hobby or an interest into a business and many of them look at the store through their eyes, not the consumer’s. Unless you’ve otherwise gained their confidence, they are the experts and you’re the ad peddler.

You can help your cause by educating accounts about best advertising practices through flyers, house ads and even seminars to business groups. The best insurance, however, is to manage customer expectations when you make the sale to be sure they’re not expecting too much. Your credibility is limited when you’re about to get the boot.

If you believe in your paper and the ads you’ve created, look the owner straight in the eye and ask why they think the ads aren’t working and the basis for that opinion. Don’t let this be an emotional response from the account; make an effort to quantify the situation by probing the business. Ask them about store traffic, not just sales. Was it higher or lower than last month? Do they have accurate records comparing store traffic versus actual sales, year over year, year to date? How many people came into the store, how many actually bought something and what’s the average transaction value? A smart business owner will even keep a journal even noting the weather, or other events that might have influenced business, including a better deal from the competition.

If store traffic is significant and sales are not, it doesn’t mean the ad didn’t work. Your job is to create response; their job is to make the sale. But be careful with that because some store owners don’t take responsibility easily.

My bet is the majority of business owners will be unable to provide much of this information. You bringing that up may not make any difference, but at least you’re doing your best to get perspective and you’re exhausting all options to be nice about it.

As a publisher I always struggled being candid with store owners because I didn’t want to make then angry and lose their business. But after hearing them bad-mouth our papers, I developed a very different attitude. Their arrogance and ignorance was hurting the paper and the opportunities for other businesses because people were being told the paper doesn’t work.

After slipping on ice from un-shoveled sidewalks, making return trips to stores that don’t keep the hours they post, waiting for untrained clerks to stop eating lunch or get off their cellphones, I know it’s not all just about the ads not working.

When all else fails try to make the business see and confront the issues. It’s not for the weak of heart and it has its risks, but if you’re going to the gallows you might as well push for a fair trial and give them something to think about.

In seminars I put on for business groups that are sponsored by client newspapers I distribute a self-assessment checklist that asks businesses to evaluate themselves in six critical areas and whether they consider themselves strong, adequate or if there’s room to improve. I suggest that store owners distribute a copy to each employee and then have a meeting to discuss the results. Done with candor, it forces the owners to discuss things that might not normally be aired.

It’s a great way to tell someone their store is filthy without getting punched.

(If you’d like a complimentary copy of this checklist email me: john@johncpeterson.com. If you have a decent working relationship with the store owner you can do it yourself. If the owner gets testy, blame it on the consultant.)

Sam Walton said it best:

“There is only one boss. The customer. And he can fire everybody in the company
from the chairman on down, simply by spending his money somewhere else.”

And that comment applies to newspapers as well as their customers...

If you’d like more information about sponsoring a seminar for your business community go to johncpeterson.com and click on the tab, “Educate your customers.”

2011-08-09T08:38:00.000-07:00

Walking a fine line with accounts

and some of the “things” they do

How do you tell an advertiser, they’re about to do, for lack of a gentler expression, an unwise thing?

Now when I say unwise, between us, I mean bad things like: Cut way back or drop out of the paper, run a real ugly ad or say something in an ad that you know is false. Also include in this category letting them buy things that you know won’t work. Then there’s the ultimate in ad revenue pain, “We’re not going to run that ad.”

Better yet, how do you tell them it’s the store, not the ads, that aren’t working?

Things like that can take all the fun out of selling advertising or running a newspaper, huh?

Of course the answer is proceeding carefully and tactfully, but the higher requirement is the conviction and guts to do it. Too many people wimp out, take the money and hope for the best. That’s certainly the easiest course, but hardly the wisest. I’ve seen more papers lose rather than gain business by going that way.

Below are some of the unpleasant situations and conversations many papers encounter.

Cutting back or dropping out is the easiest of these conversations. You explain that advertising is a process, not an event; that by advertising they’ve created mental equity that must be maintained, and they would certainly not want a competitor to come in and capitalize on their investment. People are looking for their ads and surveys indicate the majority of consumers think there’s something wrong with a business if it doesn’t advertise. Okay I understand you need to cut back, but don’t drop out. Out of sight- out of mind, that’s the worst thing you can do to your business.

In a troubled economy an account has to make even more noise in the market in the market to get what money is out there. If people are spending 40% less money on dining you need to provide them more information to make your case. Think frequency and mental equity.

Selling things that won’t work. At the top of this list is, “Let me try one ad and see what happens.” The practice goes back to Moses, but the only reason it worked for him was he had some pretty big things to say. I always suggest converting the amount they wanted to spend into a program, if it’s enough money to work with. If not, walk away from the business and fall on your sword. I’ve seen more sales reps get instant respect and generally more revenue because they showed character and wouldn’t sell something they knew was wrong. It certainly gives the account something to think about when you walk away from the money. Yes publishers and sales managers, I said don’t sell the ad.

The other side of this coin is self-preservation. The only thing worse than not selling an ad, is selling one that didn’t work. You don’t want that person to be able to say they bought an ad in the paper and it didn’t produce a response. It’s pretty tough to counter and it could cost you a lot of ads going forward if they spread it around town.

Dumb, ugly and less than honest ads. I think the epidemic started about 20 years ago with the proliferation of home computer and design software programs. Would-be designers and their prodigy children offered up some of the most horrible ads within four borders (actually some were even circles, trapezoids and other shapes that defied comprehension). The tactful salesperson reacts by saying, “I think it’s well done (clever?), but…” After that you can say things like unfortunately I’m not sure the majority of the people will get it, I’m not sure it fully reflects your best business, etc.

Then there’s the retailer who wants to over sell the store in the ad. Lowest prices, largest inventory, etc, and you know it’s not the case. Again, start off with a compliment, but work in a friendly lecture about perspective and individual realities. Disappointing consumers with misleading advertising is hardly the way to build credibility and long-lasting relationships.

“We’re not going to run the ad.” My personal gut-wrenching experience from my publisher days involved a $2,000 ad created by the son of a prominent restaurateur that was supposed to run in all editions of our summer guide. This was no kid, he was middle age, but I set myself up the year before by calling him up and telling him how much I enjoyed that year’s ad which I honestly thought was agency quality. Fast forward one year and the ad rep comes into my office with an expression that was somewhere between a smirk and extreme pain.

“Richard (last name omitted) wanted Mr. Peterson to see this because you liked his ad so much last year,” the ad rep said. With that he handed me a folder that contained one of the ugliest and totally unreadable ads I had ever seen in my life. It had large thick Old English type printed backwards. It was Richard’s idea that people would read the ad in a mirror and be convinced this was a restaurant they just had to visit. Richard thought he was being clever, very clever.

“This is a joke, right?” I asked.

“”No, and he says if it doesn’t run as is, he wouldn’t run it,” replied the rep who said he had already explained our policy about ads that challenged readership or played tricks on readers.

“We’re not going to run it that way,” I said.

“I know that, Richard’s expecting your call,” the rep responded.

Two thousand dollars is still a lot of money, but in those days it could mean the different between making and not making budget for the publication. This was supposed to be the back cover and we were on deadline, and we needed the money. But it was my rule.

The call to Richard got as ugly as the ad. He expected me to be impressed by his continued creativity and wasn’t one for rejection. He couldn’t understand why I wasn’t thrilled with the ad and questioned what happened to free speech and a free press. It was his money, and who was I to tell him what was good for his restaurant. He knew his customers, and on and on.

All these years later I still think it was one of the dumbest ads I’ve ever seen, but I tried to be tactful. I said I thought it was an interesting concept, but I was concerned that day trippers and people passing through the region might not have access to mirrors the way people in hotels did. My greater concern was he wouldn’t get the full value of the money he was investing because he might be missing part of the audience.

Before the call ended we not only lost that ad, but all of his business which was a good $20,000 a year. Richard even stopped talking to me at Chamber of Commerce meetings.

The morale of the story? Think twice about creating personal monsters; there are plenty of them out there already. My effort to stroke Richard the year before clearly cost us the account.

Some days you’re the ringmaster, some days you’re cleaning up after the elephants. Damn rules.

Next: How do you tell accounts the ads are fine, the real problem is with their business?

2011-07-26T10:36:00.000-07:00

Walking that fine line with accounts

and some of the “things” they do

By John C. Peterson

The Peterson Group

How do you tell an advertiser, they’re about to do, for lack of a gentler expression, an unwise thing?

Now when I say unwise, between us, I mean dumb things like: Cut way back or drop out of the paper, run a real ugly ad or say something in an ad that you know is false. Also include in this category letting them buy things that you know won’t work. Then there’s the ultimate in ad revenue pain, “We’re not going to run that ad.”

Better yet, how do you tell them it’s the store, not the ads, that aren’t working?

Things like that can take all the fun out of selling advertising or running a newspaper, huh?

Below are some of the unpleasant situations and conversations many papers encounter.

Yes publishers and sales managers, I said don’t sell the ad.

Then there’s the retailer who wants to over sell the store in the ad. Lowest prices, largest inventory, etcetera, and you know it’s not the case. Again, start off with a compliment, but work in a friendly lecture about perspective and individual realities. Disappointing consumers with misleading advertising is hardly the way to build credibility and long-lasting relationships.

“This is a joke, right?” I asked.

“We’re not going to run it that way,” I said.

“I know that, Richard’s expecting your call,” the rep responded.

Before the call ended we not only lost that ad, but all of his business which was a good $20,000 a year. Richard even stopped talking to me at Chamber of Commerce meetings.

The morale of the story? Think twice about creating personal monsters; there are plenty of them out there already. My effort to stroke Richard the year before clearly cost us the account.

Some days you’re the ringmaster, some days you’re cleaning up after the elephants. Damn rules.

Next: How do you tell accounts the ads are fine, the real problem is with their business?

2011-07-05T07:22:00.000-07:00

Measured, educated response
best way to handle
cut-throat competition

By John C. Peterson
The Peterson Group

Many community publications are suffering severe and sustained revenue loses at the hands of desperate competitors it seems will do anything for a little cash flow.

It’s hard to be smarter than your dumbest competitor.

That gem was not an original thought. I heard it from Dan Burke, then president of Capital Cities/ABC in a publishers’ meeting many years ago.The comment came after a publisher was lamenting revenue loses driven by the low rates of a competitor’s start-up. Think about it for a minute, it’s a beauty.

Dan’s comment couldn’t be more appropriate in today’s operating conditions. Many papers are doing some pretty foolish things in the name of cash flow. Some do it in the name of “value-added packages,” special offers, or just plain unabashed and reckless price cutting.

So how do you respond?

If the consequences weren’t so severe I could be amused by one metro daily’s “January-only” limited special rate that continues as I write this in late May. You can buy a full page black and white ad in any Sunday zone for $400.00. Process color is an additional $100. No contract or commitment is required. The normal price for a black and white ad is in the $1,500. range, with a contract.

So how does a 35,000 news weekly respond when its 52-week contract price for a full page is near $2,000? They couldn’t produce that ad for $400.

Gulp.

The last thing you want to do is cut your price. You sell value and effective circulation, local and relevant content. They may have more circulation but you’ve got the copies that count. Your circulation saturates the area; it’s not spread over a remote massive county with aggregate readership that has limited benefit to a local business.

You risk your credibility and account relationships if you cut price. Your regular loyal customers who have been with you for years will wonder if you can sell it dirt cheap now, have you’ve been screwing them in the past. How will you ever get back to real prices?

It’s like a punch in the gut if you’re a struggling community paper. This daily is likely trying to generate cash flow and snag a few new customers. They’re attracting bottom feeders and people looking for deals, you’re there for the long haul. The daily is taking away business with its crazy pricing but those rates are not going to last forever. You have to wait it out because when that daily tries to sell real rates it will lose a lot, if not most of that business. You’ll still have your integrity and real rate.

The metro’s January-only special has become a January-February-March-April-May special and shows no signs of stopping. Extended by popular demand? Right...

Not only have they made a joke of their rate structure, but what have they done to their integrity? Makes you wonder how many of these “special deals” contributed to the poor first quarter results some of the larger newspaper companies.

This specific situation has clearly hurt the local weekly competitor. Small accounts thrilled with the lure of a metro Sunday edition for such a cheap price dropped out of the weekly to try it. The weekly lost a lot of revenue before accounts realized the difference between price, value and response and the difference between circulation and effective circulation.

Your best protection is to do a good job educating your advertisers about the value of your product before you have a challenge. You’ll have more credibility when it comes time to confront the “great deal” offered by the competition if you’ve already told your story. With reps trained to sell value, reps who can clearly differentiate your publication from the competition, you’ll be in a much stronger position. If you have a rate card with integrity your sales reps can also sell with more conviction.

The temptation to fight price with added value can be a risky proposition. Accounts will wonder why you can do it now when it wasn’t there before. Roll it into a new commitment if you can, but don’t make it look like they’ve got you on the run, and never do for one account what you’re not prepared to do for every account at that level.

There are two things to keep in mind. First, a precedent can easily become a principle. I remember listening to an agency buyer on a panel a few years ago who said newspapers should never send him a special rate they were not to prepared to live with forever. Makes sense, you just set the value of your publication. If you did it once why can’t you do it again? And again and again…

Secondly you can never increase prices as quickly and drastically as you cut them.

Your pricing and every decision you make about it reflects on how you value your product. Any adjustments you make along the way send a message to your customers.

Think long and hard before you do cut price, because it’s a pretty good bet you will risk value if you have to adjust your costs to compensate.

As difficult and threatening as these situations may seem, don’t blink. If your product is strong, you will prevail. In the end, it’s about response, not price and that’s a song you need to sing to accounts on a regular basis as preventative medicine.

2011-05-10T07:54:00.000-07:00

Cut-throat agencies hurting

community publications’ revenue

While the recession has certainly taken its own toll on community newspapers, two other forces—aggressive agencies and competitor price wars, are wreaking their own havoc.

“Let’s start negotiating,” was the first sentence of a recent email received from an agency representing a major wireless company. Not quite the way I would start the conversation but this email, only went downhill from there. It went on to explain the account which it had recently obtained was reevaluating all its media buys and was prepared to cut any that didn’t make financial sense. The account had been in this particular paper ten years.

The agency expected the paper to be aggressive and wanted the absolute best rate (lower) wrapped around a value added package of free ads in both print and web products. The agency was not prepared to sign any contract but if one was legally necessary they wanted short rate protection.

Consider the irony, a wireless company that didn’t want a contract.

The email was sent to a publisher I consider one of the most highly-principled publishers I have ever met in 43 years in the business. He is passionate about his newspaper and his community and fiercely loyal to his local business community.

His principles are carved in granite. If the newspaper has integrity, so must the rate card. No business should have an advantage over another and that applies to the major retailers and agencies well-known for their arm-twisting. He has never deviated from his rate card, and yes, he has lost business because of it. His sales reps know better than to ask, but they say it does make their position tidy in the market.

In the publisher’s response he pointed out the paper’s circulation penetration, its high readership and strong editorial content and how the publication and its products were different from others in the market. He sent copies of the paper because the buyer had never seen it.

“The key to successful advertising is not price or saving money, but rather a consistent and engaging program presented in an environment that readers value,” was the publisher’s closing comment in his email response. It was lost on the buyer.

The buyer’s reaction was predictable. “I work with over 100 papers in the country and I’m telling you your rates are way too high.”

Too high compared to what? Where, what kind of content, how much circulation? Are any two newspaper cost platforms alike?

I’ll respect any buyer looking out for their client, but this was nuts. At this point of the transaction it became clear this was all about price and had nothing to do with value or response. The buyer’s price objection was attitude driven. It was now a wrestling match and only he would win.

In this on-going saga, the “negotiator’s” boss who called the publisher when discussions reached a roadblock said the agency is prepared to drop nearly 100 print products from its schedule because of rate.

How do you tell the client they were in 100 wrong places paying too much the year before? Sounds like walking the plank to me.

There was another case involving a daily in New England with about 15,000 paid circulation and a saturation product with another 10,000 to non-subscribers. The agency represented two major retailers who were competitors and then took on a third competitor client in the market who had been advertising in the paper for about a year. All three accounts had contracts to run inserts 52 weeks in both products and they were all charged the same rate.

The agency said the new client was struggling and demanded a 20 percent price reduction saying it would have to cut or eliminate the schedule if they didn’t get it. The publisher responded he was unwilling to cut the rate. The paper had not had a rate increase in four years and it would not be fair to other customers.

Additionally, the publisher pointed out, it would not be in the best interest of the client to reduce the buy because the competition would be reaching 10,000 additional households in the market. The agency replied the client had a budget and if the publisher was unwilling to negotiate they had no choice but to drop the non-subscriber circulation. The publisher talked with the store manager who was opposed to the change but had no say in the decision. The publisher’s efforts to go around the agency and talk to executives at the corporate level were unsuccessful.

So that $65,000 a year account was cut to $40,000 and then a year later the store dropped out completely, claiming the paper no longer worked for them. It moved its inserts to a competing daily with 60 percent less penetration in the immediate market but much more circulation in remote areas which would seem very unlikely to benefit the store. On a cost per thousand basis it might have looked like a good deal, but it was certainly not effective circulation for the store.

Put yourself in that publisher’s shoes. He could have given in to the demand for a discount, sacrificing about $13,000 to possibly save the $52,000. I say possibly without a lot of conviction because I think it was only a matter of time before the other two competing stores represented by that agency would have demanded the same reduced price and the publisher would have been looking at $39,000 less per year and fulfilling that business at break-even or even losing rates. In the end he lost revenue but protected his margin, and very important to him, his integrity. The two other competing stores have continued to maintain their schedule.

There are several ways to look at this. The cynics among us could say the agency was trying to recover its fee or look good by cutting the size of the advertising buy. Since there was never any direct contact with the client we can only wonder if anyone at the executive level realized the savings was the result of reduced coverage or the agency’s negotiating. Did the store feel the impact of less circulation? We can assume so, but probably not immediately because I’m guessing there was some residual value from its previous advertising.

But you have to wonder about the motive. Is this about the agency and its cost or what’s best for the client?

Remember the “old” K-Mart in 2001 that went bankrupt? Its stock was up 92 percent in August when then and soon former “turn-around” CEO Chuck Conoway decided to make immediate and drastic cuts in the marketing budget. The epitome of arrogance, cut advertising in your hottest sales months. The company then did what is very hard, almost impossible for a major retailer to do; it lost money in the fourth quarter.

Advertising is a consumer service and these were the months they needed information most. The answer was simple for analysts, Target and Wal-Mart gained market share while W-Mart was saving advertising expense. By mid-January 2002 K-Mart stock had fallen from $13.35 to $1.25. Conoway’s farewell speech included the following comments:

"There’s no doubt we made a mistake by cutting too much advertising too fast."
"Clearly we’ve learned where the threshold of pain is in advertising."

Might the expression, “Out of sight, out of mind apply?”

Next: What do you do when the competition suddenly offers prices below your costs?

2011-02-23T07:42:00.000-08:00

What’s the weather

like in your company?

Sunny and clear? Fair, or overcast and dreary?

Be objective before you answer, and understand this is a trick question.

Several years ago I was in a sales meeting with a client company leading a discussion about the difficulties the economy had imposed on revenue efforts and how the staff might respond, when the publisher spoke up. “Say what you want, but January and February are going to suck, we’ll be lucky if we’re only down 20 percent,” he said.

If I was sitting next to him I might have kicked him under the table, or worse.

Rather than say the company needed to be creative and work even harder, in effect he gave the staff permission to have two lousy months, and they did.

I can’t say he programmed it that way or things would have been different if he hadn’t made that remark. But by announcing his expectation he created the weather in that department. Break out the shovels. Heavy snow followed by sleet and freezing rain. And yes, January and February sales tanked.

In our frustrating economy and undoubtedly the most severe selling conditions the publishing industry has ever endured, you see managers creating a lot of bad weather when they need to be working on sunshine. I know because I’m the voice of experience.

As a newly promoted publisher who came up on the news side with an unfortunate natural resentment for the sales department, I believed our weakening sales were a function of people slacking off. So I got on the sales director who in turn jumped on the regional sales managers and pretty soon our 28 member display department was in a tizzy and sales got even worse.

As I dissected the issues, I was at least 51 percent of the problem. I had never sold an ad in my life, and I soon learned that managing a sales department was probably the toughest job in the company. Tell someone in the news department to cover a meeting or interview a Congressman, the assignment and expectations are generally clear for an experienced professional. Tell the pressroom and mailroom they need to be out two hours early to beat a predicted blizzard, they adjust and make it happen.

You can’t demand sales. There is no silver bullet, you can’t push buttons, and there are too many variables. To be effective you must both lead and support and it’s a skill set that eludes many managers. Our sales increased when I better understood the conditions our sales reps were operating in and I learned to support instead of scold them. What I thought was “excuses” were conditions and obstacles the reps needed big help with.

Now before you jump to the conclusion that news guys are like that, take a good look in the mirror. Most sales managers got where they are because they were good salesmen not because they had tons of management expertise and experience. Great salespeople are not always good managers. Plus, the qualities that may have created sales stars five or ten years ago are in the trunk of your father’s Oldsmobile. It’s a whole new world, and sales challenges are constantly changing.

I’ve done triage on battered sales staffs from coast to coast and the common denominator is the weather, the operating environment created by management. Call them lazy, dummies and incompetent (I don’t make this stuff up.) and they’ll begin to believe it. Keep shaking your head in sales meetings and you’ll get a response. The first sign is bowed heads, followed by quiet and most lijely even less production.

Good bosses lead, inspire and support. They should be there to help because good leaders and managers create an atmosphere for success and do everything they can to remove the obstacles.

Style and execution will be driven by the situation but my first choice of management style is consensus. It’s WE, not YOU or I. You’re in it together and equally invested in the effort. The other side of the coin is the autocrat who demands and drives the staff and I’ve seen very questionable results with that style. When people feel they have participated in the discussion and plan, they’ve got a stake in the results. If reps believe, they sell better.

The good manager is upbeat and positive but not phony. Save the backslapping because any rep worth her or his salt will see right through it. They sell too, remember?

A good manager is close to his staff. Whether that’s a quick conversation on the run or regular weekly sit-downs or call reports, the manager is in touch with their daily activities, problems and victories. His or her door is open and they’re approachable. Asking for help should never be considered a weakness. Smart managers ride with their reps.

A healthy sales department has a team environment and that’s helped in large part with regular and constructive sales meetings. Ask reps to come to each meeting with a success story and see the dynamic that creates.

Good managers need to teach, but few of them do, and this is a common weakness amongst many companies I see. This is also confirmed by surveys I’ve conducted for several professional associations. Only an average of one out of five companies reported they had any training component, including for new hires and my guess was a good portion of them were stretching the truth.

The companies who think an inexperienced rep is ready for prime time after spending a week riding around with other reps will generally reap what they sow. Mother said you only get one chance at a first impression and we all know she was right. If you’re a prospective advertiser how much confidence will you have in a rep that can’t explain the rate card or discuss mechanical requirements? How soon will you be willing to commit thousands of dollars to any program he or she suggests?

I know of a company with a new rep who made 50-60 in-person calls his first few weeks alone but sold only a few ads. A significant number of the accounts were regular advertisers so it puzzled the ad manager. As we questioned the rep the answer became clear. On the majority of those calls he failed to see the decision maker. No one told him he should have an appointment or call ahead to be sure the key person was available. And yes, many of those accounts who wanted to advertise were upset.

Some companies will say they cannot afford training, but I maintain you can’t afford not to train at some level. Because I’m in the business I advocate the high road for professional customized training or seminars sponsored by a trade association. But at the very least companies need to include some element of training on a regular basis. Rotating that assignment amongst members of the sales staff is a good start. You can tap into the individual’s expertise and it can also be a great morale booster for the people involved to be recognized for their skills.

The good manager is also sensitive (but not weak), fair and consistent. The good manager has no pets and treats everyone equally. The smart manager nurtures morale and knows it’s not good to keep changing goals, commission and spiff plans.

The wise manager is one mindful that every word out of his or her mouth will never be forgotten and that everything they say or do or don’t do, contributes to the weather in their department.

Managers, good and bad, reap what they sow.

Next: Why do so many new initiatives and sales projects fail?

2011-02-21T15:46:00.000-08:00

Smart sales operations channel business

“The best time to plant a shade tree was 25 years ago.

The next best time is today.”

--Old Chinese proverb

Read that a few times and then think about using it as the quote of the week for your next sales meeting.

That little nugget is the difference between a successful sales department and one that’s stressed and struggling.

Successful reps manage their business, stressed reps react to it. Both types could be working very hard-- the stressed ones maybe even work harder. The difference is results. The smart rep has already planted the tree; the stressed one is looking for a shovel and a place to dig.

The smartest reps I know have created a pipeline of business because they know you lose accounts a whole lot quicker than you can ever sign new ones. That ten year regular could be gone in a heartbeat but it generally takes weeks and months to develop a good new advertiser.

Several years ago Ottaway Newspapers, now Dow Jones Local Media Group, surveyed its community newspaper sales reps about how much of their time they spent reselling existing business versus developing new business. The answer for new business was somewhere between five and 10 percent. I’m betting the five percent was a stretch for some.

Account turnover is inevitable. You know you’re going to lose business. People are going to cut back, drop out of the paper or go out of business. In the old days you might have been lucky with new store openings, but save those stories for your grandchildren.

I’ve seen plenty of companies that churn over 30 percent of their business annually. So if turnover is a given then planning is your insurance.

Business owners aren’t sitting around waiting for the rep to drop by so they can place their order. If they were convinced advertising in your publication was good for them they’d likely already be in it. Sales are a process and it takes time to move people to action. It’s highly unlikely you’ll drop in and walk out with a six-month contract on your first visit.

Done right and in the interests of creating credibility and trust, not to mention creating an advertising program that works, the process takes time. I advocate a three call process that starts with a drop by to make an appointment to conduct a needs analysis at a time convenient for the prospect. Go there in person, it gives you a chance to look over the store and you’re not a stranger for the next meeting.

It might be a week or two before that meeting happens, then a few weeks before another meeting to make a presentation on what you learned in that first meeting. People aren’t quick to go from spending nothing to committing to serious money. They may want time to think about it, or they may want to try a less expensive test to see if the paper works for them. Time passes. One month, two months, maybe more. It takes time and effort to educate them and move them from indifference to conviction.

The channel or pipeline approach understands and compensates for that timeline. It acknowledges that the process takes time. The first appointment may not produce a meeting for several weeks and it may be a month after that before you reach the proposal or decision stage. But the smart rep is out there making appointments and having meetings every week, moving the process along.

If you’re not doing anything like this start off slow. A minimum of two new accounts per week is certainly reasonable. The two appointments will eventually become meetings and then presentations. The key is getting the ball rolling so activity is constantly evolving and replenishing itself.

In a perfect world all of this should happen naturally, but we know it doesn’t. So absent self-motivated and ambitious sales reps, someone needs to make sure it happens right, and to do that you need to track it. Week by week, and step by step to be sure the pipelines get filled with activity.

Success comes with tracking. That dirty word, I know. Tracking means paperwork and just about every sales rep or manager I’ve met In 40 years hates paperwork. I haven’t found any better way to accomplish this, but you can make it pretty simple and painless like the example that accompanies this article.

To make this work, managers need to offer comment and suggestions because the process is useless without it. It’s not busy work or the publisher’s new quirk of the month. It should be the starting point for meaningful conversations about revenue development and that should be in everyone’s best interests and a company goal.

Email John@johncpeterson.com if you would like a free example of a good tracking report.

2010-11-17T14:28:00.000-08:00

Do advertisers believe that
your publication works for them?

By John C. Peterson
The Peterson Group

Call it an epiphany or consider me a very slow learner, but I have finally gotten to the common denominator of every sales objection ever uttered in newspaper advertising.

They can tell you they don't have any money, or they have all the business they need, or they're happy with their cable or radio buy, but the truth of it is, they don't believe.

They don't believe your business proposition, they don't believe your marketing materials, and they don't believe your sales reps. Plain and simple they don't believe that advertising in your paper works.

Sometimes companies get exactly what they deserve.

Look at what you're doing. Are you just peddling ads or are you clearly demonstrating your commitment to successful advertising and making a strong case for how your publication will be good for business? Are you schlepping around week to week, or are reps doing the right things for your company and the accounts they serve? There's a big difference.

Do prospects and accounts feel comfortable and confident about your publication and the rep? Do you quantify the value of your readership; differentiate your paper from the competition? Do you give them a good or compelling reason to advertise? Do you show them how your publication would be good for their business and help them prosper? Are you offering third party evidence and research to make your case? Are you offering accounts things that are good for them?

It may be just another sales call for the rep, but it is a big decision for the account, so proceed with that in mind. The business has issues and concerns and we need to make them comfortable before we ask for the order. You need to create value-and you need to make it clear and logical.

Consider a three call approach for new qualified prospects. The first visit is a drop by to make a quick tour of the store and introduce yourself to the owner or manager, the person who makes the advertising decisions. The conversation is quick because you are an unannounced visitor and they are presumably busy. You ask: "What would be a good time for me to stop by and learn more about your business?" The operative expression is learn more about your business. Emphasis on their business.

You haven't mentioned selling them anything; you just want to learn more about THEIR business. Few people will decline because you are asking for a convenient time to talk about them. With this approach you accomplish several things. First of you have an appointment at a time that should be good for them, and their agreement is a possible indication of interest. You've probably also distinguished yourself from the majority of ad reps who think every merchant just waits for them to appear in their store as if by magic.

But even more importantly you're not a stranger on the next appointment.

Before that second call you do your homework. Where are they advertising now, have they advertised in your paper before and how did that go? Are there any ads in the archives? Check out the Yellow Pages and Google to see how the business fits in the order of things and what they might say about themselves and what the competition is saying. Visit their website if they have one and check out the competitions' as well.

Call two is all about the customer. On call two the rep goes back to develop an account profile and conduct a needs analysis. You're not there to sell anything; you just want to learn about the business and its needs. It's a 15-20 minute meeting and you cover things like:
• Brief history of the business.
• How they view the business, how is it different from others like it?
• Who are their customers and where do they come from, what are the most popular items, average transaction values?
• Is present customer activity meeting all their expectations, is there any part of the business they would like to change or develop?
• What is the owner's vision for the business, short and long-term?

You also explore their past advertising experiences. What's worked and what hasn't worked? You want to plant some seeds about good advertising practices for your next visit and begin to manage their expectations about advertising. Don't sell, be subtle and conversational.

Email me at john@johncpeterson.com for a sample form use in the interview.Or call to see how this program can be implemented at your company.)

You accomplish a few things with this approach. You'll likely impress them by showing a genuine interest in understanding their business and its needs and you probably distinguished yourselves from most other reps who call on them. You've taken the time to listen and that means something to someone who's going to be asked to spend a lot of money. We always expect a doctor to diagnose before they prescribe, so why should this be any different? One size does not fit all.

Call three is game time. You've created a proposal based on your findings in call two, plus other research from business development tools such as Admall.com (I don't get a nickel from these folks, not even a beer at a conference. But if you haven't seen it, take a look. It's the most powerful selling device I've ever seen. When you can report things like consumer spending by zip code, and percentage of store sales by month, you've got perspective.).

Proposal, like in written? I can hear the sighs as I type this. I know, you say, there's no time for this crap...

Absolutely put it in writing and give it a cover sheet. My suggestion is to offer programs at two or three spending levels. Good, better and best. You're giving them options instead of an ultimatum. This approach offers choices and averts an outright rejection, giving you more to discuss if they do have issues about money.

Put everything in writing because it offers a permanent document and that beats hoping they remember five percent of what you said, and it protects you in case the prospect really does have a spouse or partner to discuss it with. It's also impressive and flattering to the business that you took the time to do the work.

A neatly typed page or two or several PowerPoint slides is fine. Include copies of research you've accumulated. Just staple it if you're cheap and lazy. A cover sheet with their logo makes it personal and it's a compliment to the business. An inexpensive plastic folder will knock their socks off.

In the third call your conversation and the proposal largely reflect what you learned in call two. For example the power equipment shop owner told you he wanted to expand his repair business and create a strong presence in two towns where he had few customers. You remind him of that in your conversation and show him an ad schedule that matches consumer spending patterns. If you're a multi-zone publication the ad schedule may be weighted to the towns he wants. If you're smart you've included a few spec ads strongly positioning him in the marketplace. That's real flattering.

This is where you start talking up your publication and company. The prospect has identified needs, now you show them how your product gets them where they need to go. Your company is the solution, so prove it to them with circulation maps, audits and testimonials. Combine this with independent research supporting size and frequency and you've made a very strong case. Most reasonable people tend to respond to logical things that are good for them.

By the way we're not selling ads here. We're selling programs, campaigns, and strategic plans. We're investing time in a commitment to advertise. This is about what they're going to advertise week by week, not if they will advertise.

Advertising is a commodity and an intangible one at that. It comes with no money-back guarantees or warranty, so it is imperative-critical even, that the ad rep does everything in his or her power to make the buyer comfortable and confident in the process and do everything possible to make sure it works for the account.

But it takes effort and most reps will say they don't have time to do this. I've got a one word response for that and the hint is you'll find lots of it in cow barns.

We're not talking hours and hours of work. The first few might take an hour or two, start to finish, including the interview. Once you done a couple it will be much less.

Too much time? Ask yourself this: Is the opportunity of a smart call a better bet than the almost-certain wasted time devoted to 6-10 cold calls? I know the answer because I've seen the money.

Smart managers make it a weekly requirement for each rep to pursue a different category (or two) and share the research amongst the staff. It's a good idea to use a similar approach to conduct an annual audit of existing accounts.

I'm convinced the process works and generates new revenue. But some managers and publishers I've discussed this with just shake their heads and say, "This is too much work, and the reps will never do it."

It's clear who's running that company.

In organizations like that, sales reps will continue doing what they're doing and publishers will keep getting what they're getting.

2010-04-19T08:48:00.000-07:00

How well are you telling your story?

I got a fat lip sitting in a seminar recently.

No, no one punched me and I didn’t fall. It was self-inflicted out of fear I would offend the host or be the object of an angry mob because my comments about newspapers and good advertising practices would have been blasphemy for the majority of those in attendance.

So I bit my lip, for the better part of an hour.

I attended the seminar sponsored by a local web design company to learn more about effective online marketing. I suspected it might get ugly when one of the first questions was, “How many of you have cut back your advertising in the last few years?” About half of the 45 people in attendance raised their hands. Smiling and apparently proud, those in the front turned around to see how many less smart people were sitting behind them.

I twitched when the facilitator asked for their reasons for cutting advertising. Here are three that won tokens for a fifty dollar discount off the websites the seminar host wanted to build for those in attendance.

“To save money.”
“No one reads newspapers anymore. They don’t work.”
“Everyone is going on line.”

I resisted the urge to jump up and blurt: “Cutting advertising to save money is like leaving your watch at home to save time!” I wanted to hurl statistics about how print drives web, and preach about how frequency creates memory, that advertising is a process not an event.

But I wimped out and bit my lip. This was not the time or place.

I tolerated the next 20 minutes or so until the part about how the advantages and benefits of web advertising compared to print. To illustrate how painful and inflexible newspaper advertising is, the owner of the web company lamented that when he was buying all the back pages of the local weekly newspaper group to advertise his business, he would have to wait an entire week to change the ad if he wanted to. The price of total market coverage, God, how awful...

Then he held up the Yellow Page book to wail about all the money he had to pay for the back cover regardless of how many calls he got each month, the point here is that pay for click is King. I’m the last one to stick up for Yellow Pages but here’s this now very successful guy criticizing the very mediums that got his business started. I wondered if anyone in the audience would connect the dots, but the room was quiet as he gushed about how Facebook can work as a business tool. In his only support of papers, the host did suggest the option of buying a small ad in the paper directing people to their web site. That was huge, and I thought an admission of sorts.

At this point I think I started to taste the blood from my lip but thankfully the session was ending. Yet I thought, 40 or so people here got fed some bad information and they could be making some important decisions with no other perspective.

If there was a central theme to the web seminar it was saving money by curtailing or cutting traditional advertising (after you spend several thousand dollars for this guy to design your web site). That’s certainly music to a small business’s ears, and this guy had the graph to show the growing traffic on Facebook, Twitter and My Space. Sure people are using these free sites, but its social networking, entertainment. They’re not there to buy furniture or shoes. Sure you might get introduced to a plumber, but is that plumber going to feed his family off social networking?

Unfortunately this wasn’t the first instance of misinformation I found in my community this week. While condo shopping with one of my daughters I came across a real state company’s web site that offered this babble in 18 point type.

THE INTERNET

Its undeniable. The internet is the present and future of real estate marketing and sales. Traditional marketing methods largely involve self promotion and are becoming more and more ineffective and costly. Unnecessary costs that are passed on to you through high commissions.

Consider this: Research now shows that you are 500% more likely to sell a home through the internet than through a newspaper.

We have saved our clients thousands of dollars by controlling the costs of geographically limited and ineffective print advertising by marketing their home where the buyers are (the internet)

(Color emphasis as well as the poor grammar, spelling and punctuation were on the website.)

Now I admit I’m a hot metal/glue pot die-hard newspaper guy who believes that local papers (and the more local the better) are still the best place for local businesses to advertise. Sure the web has its advantages but it’s not ready to replace the local paper. I’ll even concede for some businesses the Internet may be more efficient, but not for Main Street merchants where I live.

I shudder to think of how much bad information is out there hurting newspapers. I cringe when I see how few newspapers make any effort to set the record straight or generate anything more than token tired and ineffective house ads—when they have room.

This misleading and false information needs to be addressed. It’s harmful to these small businesses and it fans the flames of the alleged “newspaper crisis.” Local publications still work. The latest research still heavily favors newspapers for audience and credibility and that word needs to be spread. Papers should be proactive and aggressive, running convincing house ads, doing email blasts, using bill stuffers, putting on seminars of their own. An educated advertiser is more likely to make better decisions, so teach them about best advertising practices.

Newspapers need to talk back and set the record straight, because if they don’t tell their good story, no one else will.

Drop me an email at john@johncpeterson.com if you’d like a list of some good research sources.

2010-02-16T12:51:00.000-08:00

Why do so many ads fail?

By John C. Peterson
The Peterson Group

That's a question I ask in several of the seminars I offer. The answers run all over the place but generally have a common thread.

Here's a sample:

· Lousy offer.
· Awful looking, 10 pounds of junk in a 5 pound bag.
· The ad was all logo.
· They only ran one ad.

The real answer the ad failed is, because somebody let it fail. That may be the ad rep or someone in graphics, but ultimately somebody didn't do their job.

The greatest variable in the process-- selling the space, was accomplished. The rep convinced someone on the need, benefits and value, but the ball got dropped after that.

Selling space and creating an attractive ad are not enough. The space needs to work.

As professionals we know that one size does not fit all. While some of the basic tenets will apply, every ad is unique in what it requires and it's every newspaper's duty to maximize the opportunity for success. Yes, duty, because we too are a consumer product, and we're getting paid to do our best.

The principles of successful advertising are no secret, so what was the problem? In some cases, the sales rep didn't know any better. Too many reps are salesmen, not the marketing consultants they need to be.

Unfortunately too few papers invest much time training nor do they devote great energy to creating strong ads or policing weak ones.

Is the customer the expert?
There's another reason we see so many see so many lousy ads. The answer I hear far too often-now cringe with me-- are some of the scariest words in this business: "That's what the customer wanted." The newspaper professional knew better but let the customer prevail. How many professions operate that way? That's not what we would do with our physician or the mechanic working on the car brakes.

We're talking about specialized knowledge, professional judgment, time-tested and proven elements. We may not be able to guarantee success but we can be certain about what isn't in their best interests. But, we cave because we don't want to upset the customer. At least not until we have the conversation about how the ad didn't work and they wasted their money.

Try this exercise
Here's a quick exercise to prove my point. Pick up the latest edition of your paper. Go page by page and put a mark on every ad you find engaging. By engaging I mean it got your attention and you could immediately determine what was offered.

Part two of this exercise is to go back through the paper a second time, page by page, and ask yourself if each ad answers the question, "Why?" Why here means why should the consumer buy this product or service, why should they go there, and what's in it for them if they do?

Try this with a gathering of reps and designers.

I've done this exercise with about a half- dozen papers recently. Somewhere between 10-25% of the ads passed the test. If half of the ads in your paper pass this test even by a loose standard, you're blessed.

At some companies there's a large chasm between the sales and graphic departments. Reps put notes (sometimes legible) in a folder and hope for the best. Good communication and clear instructions make all the difference. Designers may or may not have a clue about what's important to the customer or what they want to accomplish.

Reps also need to be trained in marketing techniques to know how to showcase a business and relate the "Whys" that are important to consumers. And they need to be fluent in the mechanics of best advertising practices to make their case.

Dumb or smart?
As a publisher in the good old days I would tell ad reps not to take the business if we couldn't do it right. It didn't purge us of inferior ad practices, but it was a start. Over the years I've vacillated whether that belonged in the dumb or smart column, but I reveled in the call I got from the retailer who complained the rep wouldn't take his money for one small ad. It gave me a chance to "educate" him about good advertising practices and he went on to become one of our larger accounts and one of our biggest cheerleaders.

When ads work, price is less an issue.

2009-08-21T09:45:00.000-07:00

Where's the reader value in your publication?

By John C. Peterson
The Peterson Group

I visit an afternoon daily in New York state that fills its parking lot and both sides of the street with people who get out of their cars even on the most bitter winter day to get the paper as soon it comes off the press.

At another client in New England, I was troubled by what I felt was a lop-sided ratio of newsstand versus paid subscribers for what I felt was a very strong weekly paper.

I couldn't believe more people weren't committed to the paper. The publisher said it puzzled the staff until they collected some feedback from telemarketers. Despite twice the cost and the inconvenience, a significant percentage of readers did not want to wait a half-day for mail delivery. Sure enough, drive around town you'd see people waiting at stores for the delivery truck.

Both of these companies would admit they could do a better job in a number of areas, but they were doing enough things right to be valuable and the proof was in what people were willing to do to get the paper.

Everything about a paper has a value consideration, not the just the content. It's also how people receive the paper, why they pick it up, how it looks, how easy it is to read and how they feel when they put it down. While in an ideal world we'd like to do everything perfect, you don't have to. You just have to do enough things right and guard against doing anything too wrong and create a balance that tips the scales on your behalf.

Let's start with delivery. Short of handing the paper to a reader, the next best thing for a weekly is the mail, but that's expensive. We all wonder what we might gain or lose by which method, but hung on the door knob or mail box is next, followed by thrown or racked.

My longtime client and friend Tom Ward, publisher of Breeze Newspapers in Rhode Island knows. He's 100 percent racked and it was his conscious decision to spend his money on content not delivery. Say "The Paper" in those parts and people know you mean The Breeze.

Tom has proven that people will be inconvenienced and go out of their way if you put out a good paper. People will bend over in the driveway and maybe even look for it in the bushes if you've created enough value. He created the balance.

Here's where it gets complicated, what kind of content?

Readers pick up papers for information, looking for things they don't know that interest them. News they can use, was the expression years ago. A good community paper is a smorgasbord of that information, something for everyone. It's the local bible, the owner's manual for the community. That standard applies to news and advertising alike. The key is creating utility.

The goal here is to attract readership making the best possible use of your resources, both people and paper. My mantra years ago as a publisher was, "If it's important to them (our readers), then it should be important to us." A lot of that stuff can be pretty boring to editors, but every story has a constituency and the more of them we collect the better. I used to tell my editors that every press release was a compliment because contributors were voting that this was the place to communicate.

All that news brings up another consideration that some papers seem to miss. The paper should be as easy NOT to read as it is to read. No, that was not a typo. The paper should be easy not to read. Stories that don't interest readers are like static on the radio, it interferes with their reading pleasure.

I say pleasure because reading the paper should be a pleasant experience. News should be presented in descending order of importance and impact. Big and interesting things first, stories with wide reader interest up front. Headlines should clearly reflect the story (spare me from editors who write headlines for each other). News should be grouped by town or topic. Pages should be labeled with attractive standing heads so people can blow by that category if they're not interested.

Good packaging helps create ownership. By grouping town news you can showcase the news and create a sense of ownership. People will appreciate not having to plow through a bunch of towns they're not interested in.

Pick your coverage spots. If you have limited resources and can't be the complete paper you'd like, find something you can own and build on that.
Only pick fights you can win. If the local daily is big on meeting coverage, concentrate on news enterprise or features. Give people something they can't get elsewhere.

I've seen shoppers create demand though a mouthy columnist that many people didn't like, but they never wanted to miss what he had to say. Another had success with a "man around town" column of just names and a few faces. The purists in the newsroom ridiculed it, but it was probably the best read item in the Sunday paper.

It's all about the reader, what is useful to them. Even briefs or a calendar of events will work, especially if yours is better than anyone else's. The paper should contribute to the quality of life in a community by helping readers understand how it works and what's going on. The more of that you do, the more value you create. The greater the utility of the publication, the higher the likelihood of advertsier support.

After a few decades in the newsroom, one thing remains clear to me. The newspaper belongs to the readers; we just put it out for them. Readers will always be the final judge of value and success.

Next time: Why does most advertising fail?

2009-04-18T07:37:00.000-07:00

Want more ads?
Stick to the basics, pick your spots

By John C. Peterson
Principal, The Peterson Group

While the industry rightfully laments the erosion of advertising revenue, how would you like to be an ad rep these days?

One sales rep I met recently tells of taking a 10 percent commission cut as part of a companywide compensation reduction, and this is after experiencing a 20 percent revenue loss the year before. Sales were still free falling as we spoke, and the rep was understandably concerned for his livelihood and family. He's not alone.

The rep was one of a few dozen who attended a daylong seminar I conducted for Community Papers of New England, "Outperforming Your Conditions."

Did I have any magic or secrets for them? I wish.

My advice is to pick your spot, stick to basics and make the very best use of your time. That's publisher talk for you need to work harder. And yes, that probably means working harder for less in some cases. Welcome to 2009.

No one is likely to argue it's ever been more difficult to sell advertising. It's not just about whether your paper is a better buy than the competition. These days a growing number of merchants say they just can't afford to advertise. Sure the textbook response is they can't afford not to advertise but that comment doesn't work any better than it used to, which isn't very often. Then we have those who say print is dead.

Sales, we know, is a numbers game. If you want to sell more ads you need to make more calls. But, there are only so many hours in the day, right? So use them smart. Don't go chasing inserts from big box stores; go where you have the greatest chance of success.

My advice is this, and in this order:

1. Hold on to what you have, first and foremost. Retained revenue is a major accomplishment these days. As they say in sports, it's yours to lose.

2. Try to grow existing accounts before you prospect for new business. They're doing business with you, it makes the most sense.

3. Look at former customers. They liked you once. Revisit what went wrong and see if something new can happen. Start with the most recently departed first.

4. Prospect for new business. Check out the competition and let your fingers do the walking. Literally, because the Yellow Pages is still the closest thing to a helicopter ride over your market. Plus, studies indicate that 86 percent of the money is local businesses.

5. Use common sense when prospecting. I always advise reps to call on people who advertise before non-advertisers. People that have bought advertising whether it's broadcast or a billboard are predisposed to accept advertising as part of business. Non-advertisers might need to be educated before you can even try to sell them, so it could be more time-consuming.

Time is money and it's a precious commodity.

I read somewhere that most salespeople waste 25 percent of their work week doing non-sales things. This could range from gabbing with workmates to poor planning or just goofing-off. Those reps who feel tired at the end of the day might disagree, but for discussion purposes, let's take a fraction of that time and see what we can do.

If a rep came up with five new hours a week we can assume they have a good chance of increasing their compensation, perhaps even proportionately. Here's the math. A rep who earns $50,000 a year has an hourly rate of $25.00 working roughly 2,000 hours per year (Everyone needs at least two weeks off.). Producing at the same rate, five more hours per week should create an additional $125.00 in compensation. That's $6,500 per year--a raise in excess of 12 percent. If you're making $65,000., your number is north of $8,000 more compensation. Cut the increase in half and it's still a great result for a few more hours.

Okay, maybe it's not that easy, you say. Let's concede you might have to work that extra time just to hold on to what you have. So be it. It's 2009 in the publishing world.

If you're the publisher, the possibilities of a few extra hours could help you sleep a little better. If you're a million dollar company you generate revenue at the rate of $481. per hour . If you pick up just two sales hours per week, that's $50,000 in annual revenue. If it was five hours the number would be $125,000. And yes, that's a 12.5 percent increase.

Think about how can you make it happen, maybe even discuss it in your next abbreviated coffee break.

2009-03-03T11:24:00.000-08:00

Ever know anyone

who cut their way to success?

By John C. Peterson
The Peterson Group

"You can't count on revenue,
but you can make expense go away."

How many times have you heard or said the very same thing? Yes, it's Business 101, but we need to add a few footnotes when we talk about newspapers and shoppers.

First footnote: Publishers first need to think of their products in terms of what customers need not what they (publishers) are willing to invest. There are consequences, short and long term, for every cut you make. It's just like putting a chainsaw to a tree. It will never be the same when you're done.

Second footnote: What's that saying, "Remember who brought you to the dance?" Think about what made you do whatever it is you now feel you need to cut. If you mailed to a 100 percent of the households and said it was the right thing to do for your advertisers, what do you say when you only mail to 70 percent? "I was wrong; doing it 70 per cent right is good enough these days."

Here are two very important things to consider before you cut.

You're about to give up the best shot you had, are you sure you've done everything possible to grow revenue?
Advertisers have never needed you more. Did you have that conversation with them? Not the "you- should-buy-ads conversation," the conversation with the proof that businesses that remained aggressive advertisers in tough times became stronger.

In the old days the threat of competition kept a lot of companies on their toes (and honest). That's not the case anymore. Some publishers have seduced themselves into thinking they're immune and they're pushing to see just how much they can get away with. Not smart. Papers are a consumer product, how do they expect to remain successful taking things away from readers and advertisers?

Make no mistake; it has never been tougher for print and the reality is that some expenses do have to be cut. Do that, but be sure you've given sales efforts your best shot because this may be as good as it gets.

It also reminds me of something my father said often while teaching me about home repairs. Measure twice, cut once. The lesson here for publishers is that the opportunity and the appetite might not be there if you try to go back.

Publishers who have to cut need to be creative and protect their market position. Instead of cutting 3,000 home-delivered copies, try rack distribution first. You will still have those copies working for your advertisers and can still use the same circulation number. If you've done your job people will come looking for it. If you've done your job, that is.

Cutting expenses is emotional. Increasing revenue is hard work, especially when merchants are scared and money is tight.

But the case is there for advertising. Every study of economic strife since 1923 indicates those businesses which remained aggressive advertisers were stronger and more profitable on the other side. McGraw-Hill Research analyzed 600 companies from 1980-1985 finding that sales of companies that were aggressive recession advertisers rose 256% over those that were not. Study after study indicates the same thing.

(The McGraw-Hill graph makes a dramatic marketing piece,email me if you'd like a copy.)

Papers need to tell their story and make the case for advertising. Logical people generally make intelligent decisions based on good information. Advertising helps business, plain and simple. Sure there are no guarantees in advertising, but there are plenty if you don't advertise.
There's money out there and business to be had. The number one reason people don't advertise is because they were not asked. Work at it.

Small is the new big. If the account can only afford to spend $1,000 a year, find four other guys just like him. When all this is over, they just might have some real money down the road and remember that you were there in the lean days.

Invest. The word has fallen out of our vocabulary, so try to start using it more often.

2009-02-09T09:57:00.000-08:00

Community publications need
to distance themselves
from the newspaper crisis

There are newspapers and there are newspapers in crisis.

It’s a them and us. The big guys and then the local and regional papers, be they weekly or daily, free or paid. I include shoppers and niche publications.

The big guys are in big trouble and we shouldn’t be, because their problem is our opportunity (I say “we” and “our” because I can’t get the publisher out of the consultant.).

I bet I had that conversation a dozen times in the last few days at the New England Press Association annual convention where I was a speaker. I was reassured to find there are a few publishers out there who are doing just fine. Sure, some are hurting, but some are only down a few percentage points from prior year. A handful said they were even up. I believe them because I know they put out good products.

If you’re a good local paper doing your job, I’m betting you’re going to be stronger when this is over. You just need to keep doing the things that make community papers valuable. Stick to your knitting and mind your P’s and Q’s. And don’t blink.

The franchise for the local paper is the collection process, news and advertising. Main Street and town hall and the local high school are our domain. Ask me to describe the formula for the successful local newspaper and I’ll say the same thing I’ve said for 30 years. It’s the owner’s manual for the community. “If it’s important to them (the reader), then it needs to be important to us,” was the drill for my reporters and editors. That means finding room for every reasonable press release and staying until the lights are out at the school board meeting. And yes, we may have to upset the mayor by asking hard questions.

Give that concept some thought. If you’re doing your job you’ve covered all the bases in news and advertising. You’ve provided an updated slice of life in the communities you cover. My grandparents would call it a smorgasbord, something for every appetite.

There was further evidence that local publications are healthy in a recent joint study by Suburban Newspapers of America and the National Newspaper Association. In a survey of papers with a total circulation of 10.5 million, here’s what they reported:

Data collected in 2008 showed a 1.7% decline in advertising for the third quarter, 2.4% in the second quarter and 2.7% in the first quarter (all were measured against the same reporting period from the prior year.) Fourth quarter results will be available in late February. These results compare to industry-wide double-digit declines of 18.1% (third quarter 2008), 15.1% second quarter 2008, and 12.8% (first quarter 2008), as reported by Newspaper Association of America

The opportunity?
Let’s look at what’s happened and what some of the big guys have done. They’ve lost circulation, cut staff and content, some have eliminated early week editions and others have stopped early week home delivery. The new wave is a hybrid e-paper, an early week electronic edition and late week print delivered.

They have finally admitted that all days of the week are not created equal, and maybe immediacy was not everything they said it was in the past. Some of their web sites are also a confession acknowledging that people do care about the little news in their lives. Groups like Rotary and Lions and the Chamber of Commerce do contribute to the local quality of life; the big guys just can’t justify the news hole in the paper.

Their weakness is the local publication’s strength. Don’t just print that community news, showcase it. They aren't likely to get it anywhere else. You own it and you become a bigger piece of their information life.

If you’re a weekly, tell advertisers there’s no guesswork about which is the best day to advertise. You create the event and people know when to look for it. You offer shelf life and that’s the same thing as frequency. You likely have affordable zones with strong or saturation coverage. You sell proximity and that's where the people who find it easiest to do business with them reside.

Don't say circulation, say effective circulation. There can be a big difference. Big is not always better.

I’m a newspaper junkie so none of this brings me comfort. But local publications need to pay attention to what has gone on, and step up. Yes the industry needs to develop multi-media platforms but let those e-world buzz words also ring for your paper. Content, engagement and community are what local papers are all about forever.

The sooner local papers distance themselves from the “newspaper crisis” the better off they’ll be. Create a marketing campaign to differentiate yourselves, script your sales reps to talk about it and arm them with pieces quantifying your strength and value. Tell them to “road test” the paper for accounts and point out the constituencies for news content. Count the number of paid ads in the paper (classifieds too) and tell them these people voted with their checkbooks that this is the place to communicate. Use testimonials.

No one will tell your story if you don’t. If you don't then people will just think you’re just another one of those papers in crisis.

This is no time to hold back, the stakes are too high.

Next: No one ever cut their way to success.

2008-12-05T10:33:00.000-08:00

Everyone wins when you sell the right things

When you’re the publisher of a group of weekly newspapers and shoppers, you get to ask a lot of stupid questions. One of my classics was to an ad rep that had been around for several years and carried a lot of business for us.

“What do you sell your accounts?” I asked the rep.

“Whatever they’ll buy,” was his answer.

It wasn’t the answer I wanted, but the one I heard too frequently.

What I wanted to hear was they were selling the account what was best for them—buys that would produce results. But, the more I asked the question the more disappointed I was in the answer.

I asked that question in 1989, my first year as a publisher, as a recession swept the Northeast (sound familar?). With our revenue slide reaching double-digit percentages, I was likely to be an editor again if I couldn’t reverse our trends. In the months that followed I came to realize that our “sales problem” was really a management and education problem. It was a very expensive lesson.

For the first six months of our slide I beat up the sales managers (What else can a new publisher from the editorial side do?). The sales managers beat up the reps. The reps beat up their clients. The slide continued, actually got worse. We analyzed trends, had focus groups, talked to active and inactive accounts. It became clear to me we were getting everything we deserved. We had produced our own horror show.

I kept hearing three things as I visited with active and inactive accounts. They were:

“Your people are arrogant.”

“The paper doesn’t work for me.”

“You’re too expensive.”

The arrogant comment made me nuts until I listened carefully and heard the reps’ side of things. It wasn’t arrogance; it was part of that management problem. We had put so much pressure on our ad staff to produce, they weren’t “visiting” with accounts, and if someone said “No” two or three weeks in a row, the reps stopped calling on them because they were looking for fresh meat. Bottom-line, though, the customer thought we were arrogant and to them we were. Perception is reality.

The comment about the paper not working for them shattered me. I had been the editor of the company for ten years and I knew it was well read. I had taken too many phone calls about missing cats and dropped punctuation to believe otherwise. But I heard the comment from enough advertisers and couldn't ignore it. So we kept digging for answers.

We looked at ads to determine size and offerings. We ran sales reports to look at account spending and trends. We ran reports comparing prior year spending, the year before that and the year before that. We ran reports about the reports.

The lights came on with the subtlety of a flash fire. The paper wasn’t working for many of these accounts, because we weren’t selling the right things to some of these accounts. Since confession is good for the soul, I’ll say it again. We were selling people things that didn’t work for them.

One nail salon was spending well over $100 per week on average (1989 dollars), so you’d think something would happen for them. However, much of that spending was wasted on a three-paper buy, sometimes with spot color. There was nothing this salon was doing that allowed anyone to think people would drive 30 miles to get their nails done there, passing countless of other similar salons along the way.

As we further dissected our sin, it got uglier. Our sales rep was selling the salon circulation. Not effective circulation, but a number. The daily paper was selling 30,000 copies in that region, so to compete, the rep matched the circulation number. But when our rep added the two new papers to make the 30,000 number, the account dropped in size to a 2 by 2, and that size got lost in the paper. To help pay for the new zones the salon also dropped some frequency. This was clearly a case where you would hope the rep would have believed in the advantages of size and frequency over reach. The salon could have run an ad three times that size in one paper, weekly, and owned the category in terms of presence. Eight thousand circulation in your backyard was clearly a better idea than 30,000 all over creation where it would do you little good.

It was a practice we discovered had epidemic proportions. Many reps had fallen into selling circulation because that was what the daily was selling. Circulation is a numbers game--the more the better, right? Wrong, in this case.

While it is difficult to speculate about how well an ad might have worked in a different scenario, it was certainly clear that we hadn’t given this account our best shot. We had diluted the opportunity by shrinking the size of the ad and cutting frequency. This was clearly an account that should have opted for local dominance. The ad budget would have been much better spent on more size, in one paper, every week. But that would have been harder to sell, because 30,000 sounds better than 8,000. True, but wrong.

Our second biggest sin (it was hard to rate them at first) was what I called taking the money and running. If an account had $500.00 to spend, we let them spend it as soon as possible. Many reps ran one or two large ads rather than a series of smaller ads. We didn’t sell campaigns or programs we just ran ads. The pundits might say you shouldn’t leave anything on the table when money is tight. But, we Boy Scouts should always endeavor to do the right things regardless.

After all this, hearing someone say we were too expensive was nearly music to my ears. Many of them were buying or wanted to buy, we just needed to make it feel better for them. In some cases we were stretching the account with too many zones. But we also needed to get out of our starched rate card and give them a good deal from time to time. Deeper discounts for contracts, stronger efforts on co-op money and occasional specials seem to do the trick in time. I was convinced commitment would bring us equity in the long run.

In the course of our efforts we discovered what we felt was a high churn rate for accounts. About a third of 3,000 accounts on the books had not advertised in a year or more. Now that we were a lot smarter, we had things to talk with them about.

While we couldn’t go back to these accounts and tell them we been selling them the wrong thing for years, the recession did allow us tell the accounts we wanted to change the mix and try new things for them. We recovered with a lot of hard work, training and turnover, and in the end increased our market share well beyond our slide.

John Peterson was a reporter, editor, and publisher before becoming president of the New England Newspaper Group owned by Capital Cities/ABC. The $40 million unit had 75 daily and weekly newspapers and shoppers with 650,000 circulation in Connecticut, Massachusetts and Rhode Island. He has been a consultant since 1995. His website is johncpeterson.com and he can be reached at consultpub@aol.com or by calling 860-447-9198.

2008-08-22T14:18:00.000-07:00

Slow economy presents opportunities

By John C. Peterson
Principal, The Peterson Group

The news we hear daily about consumer behavior reads like a bad novel but beneath the headlines are encouraging trends for local business and community based publications.

In June 2008, 86% of consumers told a survey that they are impacted by rising fuel prices. A similar number said they believe the country is in a recession and three in five Americans think the economy is in the worse shape they’re experienced in their life time.

Uncertain and concerned consumers are pulling back and changing their lifestyles and habits. Recent surveys indicate they go to fewer movies (47%), dine out less (45%), and are learning to be more frugal and wait for “deals.” Eighty-five percent say they usually or only buy clothing if it’s on sale. Decreasing overall spending is the top financial priority for a third of consumers. (Source: BigResearch.com).

It seems alarming news, but not all grim because the emerging consumer behavior is creating new opportunities for local businesses. People are traveling less, shopping closer to home and combining shopping trips.

Here’s the case for local business opportunities if you look at a recent survey by BigResearch.com:

 55% are driving less.

 48% are taking fewer shopping trips.

 44% shopping closer to home.

 42% are consolidating shopping trips

The statistics also underscore the case for local advertising, especially when you connect the finding from Vertis Research earlier this year that reported 83% of consumers are conducting research before they go to the store. It makes perfect sense. Money is tight, people are making choices and they need information to make better decisions.

Shouldn’t the best place to conduct local research be the local publications?

How does this translate into more advertising? Commerce has not stopped but the competition for available spending has greatly increased. Consumers are spending less and being more careful about what they do spend. People have not stopped living. They’re dining out far less, so would this not be a good time for your restaurants to communicate reasons dining with them?

Listen to what consumers are saying. Money is tight and they want information.

54% say they are more focused on needs versus wants and that sets up another case for advertising. Remember the basics, attention-interest-desire-action? Good advertising creates desire and stimulates activity. How else will businesses be telling their story, how will they be even be a choice for consumers when consumers have never been more finicky? With fuel over $4 per gallon people won’t be cruising for sandwich boards in front of stores.

These statistics show us another opportunity. People are driving less and combining shopping trips, so this would be a good time to promote some neighborhood advertising packages. That little strip mall or neighborhood center could now become a destination if merchants got together. More reasons to go there. Consider throwing in a free header if they sign a contract.

Publications need to communicate important information to their advertisers and prospects. Present the case for local advertising using consumer research available free through sites like BigResearch.com. It appears less like salesmanship and more like independent evidence. Use tools like Admall.com to quantify the value of your market and make presentations that differentiate you from the competition. Use your Circulation Verification Council (CVC) audit to prove how people use your publication. Reasonable people who want to help themselves will generally get it.

Step up and get organized. Don’t ask people to buy ads, show them programs that will grow business. Help them buy smart, go the extra mile.

Maybe it’s time to analyze buys. Since people are not driving as far it might be a good idea to trade marginal zones for size. Now you’re set up to take that larger size to more zones when things get better.

Most Main Street businesses know very little about marketing and advertising but most of them know a good thing if it’s presented right and makes sense. That was reinforced for me in two recent seminars I conducted for a client who sponsored them for his local business community. The 90 minute sessions focused on marketing, consumer behavior and what works in advertising. More than 120 people attended, about 100 of them non-advertisers, so it certainly answered my rhetoric question, “Does advertising work?”

This was the better time to educate them about what works and doesn’t work in advertising and not appear to be selling them something. This was the time to discuss the difference between “effective” circulation and remote circulation, not when you’re in danger of losing the business. Your credibility is much higher when you’re not defending yourself.

If you don’t educate your customers about best practices, who will?

In a relaxed economy where people are spending freely, some business got by no matter how poor their practices, but those days are waning. In a tough economy businesses will have to play by the rules if they want to survive. Power belongs to the consumer and the consumer is speaking loudly. They’re going local, they want deals, they want value and they want information.

Advertisers can’t drop in and out of the paper, they need to appreciate that advertising is a conversation with their customers and that consistency drives advertising success. Since we don’t know which week people might buy, they need to talk to people on a regular basis.

“When times are good you need to advertise, when times are bad you must.”
I wish I could credit the author but he or she is unknown.

There’s plenty of research to support the premise of aggressive advertising in a recession. In every depression since 1923, study after study clearly proves that businesses who maintained or increased their advertising during a recession emerged far stronger that those who cut back. One of the best studies was done by McGraw-Hill Research which analyzed 600 companies from 1980-1985. Sales of companies that were “Aggressive Recession Advertisers” rose 256% over those that didn't keep up their advertising, the study demonstrated.

Publishing companies would be wise to remember that lesson as they make their own economic decisions. Many publishers respond like they are putting their hand on a hot stove. Yes these are difficult times, but these are also times of great opportunity. There are plenty of options besides cutting and retreating, and the rewards could be many. If you can, it might be wise to think twice about margins, and look at some unique and one-time only opportunities to develop market share and customer loyalty.

Phil Meek, then president of the publishing division at Capital Cities/ABC gave me plenty to think about when I was a newly promoted publisher struggling with the recession of the late 1980s. After some pretty sharp revenue losses I was certain I would be an editor again.

“Don’t accept your market conditions, change them,” he said.

That wasn’t about cutting circulation or reducing staff or retreating. It was all about attitude and execution. We totally changed the way we thought about revenue, the way we sold, the way our customers could buy. We started new publications, identified new opportunities and pursued them with passion. We sold more advertising to fewer customers and powered our way through it to become a bigger, better and stronger company.

The world as we knew it in the good old days (a couple of years ago), has changed. Since it’s never coming back, it’s time to look for new markets and new opportunities. Small may be the new big and the best market might still be the one in your backyard.

John Peterson was a reporter, editor, and publisher before becoming president of the New England Newspaper Group owned by Capital Cities/ABC. The $40 million unit had 75 daily and weekly newspapers and shoppers with 650,000 circulation in Connecticut, Massachusetts and Rhode Island. He has been a consultant since 1995. His website is johncpeterson.com and he can be reached at consultpub@aol.com or by calling 860-447-9198.